Harry’s Take

August 16, 2022

Bitcoin Could Bottom by Year-End, While the Nasdaq/S&P 500 by

the End of 2023

I’m looking at the wave counts for the Nasdaq and for Bitcoin, and Bitcoin
looks like it has one more wave down to complete a major five-wave, A-wave
bottom by the end of this year or by very early 2023. Below, I repeat an
update of a chart I have featured recently that does indeed project a major
bottom by year-end, even though it could be retested with a C wave a year or
more from now. But either way, this would end up being a major low for
Bitcoin, not just another wave down. And my target is as low as the $3,177
low in December 2018 (as shown in the chart below) or as high as $4,001, as
projected from the second major lows in early 2020 that came after the 2017
peak.
But the S&P 500 and the Nasdaq look only to have completed a first wave
down and to be in a two-wave bounce that looks like it is about to peak and
reverse into a third wave down. I roughly expect that to begin soon and then
bottom by the end of this year or very early next year (January or early
February), as Bitcoin makes its fifth wave and more conclusive bottom, as
shown above. Let me remind you, I am merely making the best projections I
can based on the information available today, and this scenario could change
ahead.

How could I resolve this difference, a major bottom in Bitcoin but not yet in
the Nasdaq? Bitcoin has tended to lead the Nasdaq and the S&P 500, but by
several weeks, not a whole year. The best resolution, looking back at the first
tech bubble, comes from comparing Amazon, the lead company in the
dot-com tech sector bubble into early 2000, with Bitcoin today—and, in a
broader sense, from comparing the Internet Index back then with the crypto
sector at present.

This chart shows that in the first tech bubble, Amazon peaked earlier, on
December 8, 1999, versus the Nasdaq on March 10, 2000. It then bottomed
just over a year earlier on October 1, 2001, vs. October 10, 2002, for the
Nasdaq. And note that Amazon did not bounce that strongly after its earlier
bottom.

Hence, it would be totally consistent for Bitcoin to put in its major low (even
if roughly retested later) between December and January of this year, as I
best project at this early point, but then for the Nasdaq and S&P 500 broader
markets to not make such a major fifth-wave low until as late as late 2023,
one year or so later, which is also my best projection today.

The most important insight here is that the worst of the damage could very
well be done in the S&P 500 and Nasdaq if Bitcoin does make a major bottom
as low as $3,177 to $4,001 by year-end, as previously discussed.

This makes this two-wave bounce here since June in the broader stock
market into August an even more important time to get out of stocks as well
as out of Bitcoin and cryptocurrencies (for those who haven’t), which have
already been crucified much more. This third wave down for stocks normally
would be at least as great in magnitude as the first wave down we just saw
into June, but this now makes it more likely to be much stronger into late this
year or early next year. And that stock low could follow the Bitcoin low late
this year, going down by the end of 2023 as much as 86% on the S&P 500 and
92% on the Nasdaq from the all-time highs already very likely in.

Harry

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